The study found that company efforts to help employees save for retirement -- including putting the 401(k) plan on autopilot, simplifying plan choices, and targeting communication -- have resulted in some improvements in employees´ retirement saving and investing behaviors. Despite these improvements, there is still work to be done to steer employees onto a path toward a more secure retirement.
Key findings of the report include:
- Average 401(k) plan balances grew more than 8 percent to approximately $75,000, but median plan balances were much lower than the average at only $27,100.
- One third (32.8 percent) of employees did not participate in their 401(k) plan, and contribution rates remained steady at approximately 8 percent.
- Nearly half of employees examined in Hewitt´s study failed to participate in their 401(k) plan or failed to contribute enough to obtain the full company match.
- One in five employees holding a lifestyle or lifecycle fund (20 percent) had their entire 401(k) balance in them in 2005, up from 15 percent in 2004.
- The average investment in company stock decreased from 26.5 percent in 2004 to 21.9 percent in 2005. In addition, the number of employees holding half or more of their 401(k) balances in company stock decreased from 27 percent to 20 percent
Lindsay Bechtel
Hewitt Associates
847.442.7662 (direct)
847.883.9019 (fax)
lindsay.bechtel[at]hewitt.com
Visit Hewitt's newsroom at www.hewitt.com. Hewitt Associates (NYSE: HEW) is a global human resources services firm.
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